1st Meeting of National Council: Is the Government Ready to Hear a Wide Range of Voices?

Editorial

14:46 JST, February 27, 2026

It is officially called the “national council on social security,” but discussions on reforming systems such as pensions and medical and nursing care are reportedly being put on the back burner.

Also, with only a limited number of political parties attending the first meeting and no experts present, a sense of strangeness remains.

Inevitably, there is concern about discussions on consumption tax cuts proceeding hastily at meetings of this council. If the government, taking advantage of the landslide victory of the ruling Liberal Democratic Party in the latest House of Representatives election, rashly pushes through tax cuts, it will lead to serious problems for future generations.

The government has held the first meeting of the national council on social security. Prime Minister Sanae Takaichi stated, “We need to consider setting the consumption tax rate on food items to zero for two years as a temporary measure until the introduction of refundable tax credits.”

The government and ruling parties sought participation in the national council from other parties that are supportive of refundable tax credits, urging three parties — the Centrist Reform Alliance, the Democratic Party for the People and Team Mirai — to participate. But only Team Mirai took part in the meeting.

The CRA and the DPFP seemed uncertain about the impact on their party momentum if they joined the council. It is unavoidable for them to be criticized as prioritizing political calculation over policy debate.

In her recent policy speech, Takaichi had stated that the national council would be “suprapartisan.” If that were the case, she could have sought broader participation.

The national council intends to simultaneously discuss what form the tax cuts should take and the structure of the refundable tax credit system, aiming to compile an interim report before summer.

However, there are strongly cautious views about consumption tax cuts.

In the restaurant industry, there are concerns that if the tax rate on retail food items is reduced to zero while the tax rate on dine-in food and beverages remains at 10%, customers will turn away. For retailers such as supermarkets, the substantial costs of upgrading cash register systems reportedly pose a significant burden.

Takaichi must not make light of these voices with her approach of “tax cuts first.”

The consumption tax is a core revenue source, accounting for over 30% of national tax revenue. It is indispensable for steadily maintaining the social security system. In addition, as it is borne by everyone, regardless of age or annual income, a key feature is that the tax is not easily affected by economic fluctuations.

Reducing this consumption tax would mean the nation losing a stable revenue source. The impact would be enormous.

Past administrations have raised the consumption tax rate to its current 10% through various measures. When former Prime Minister Shinzo Abe raised it from 8% to 10%, he made efforts to obtain public understanding by broadening the allocation of funds — which had tended to favor the elderly — to include child-rearing generations.

If the Takaichi administration shifts course toward a consumption tax cut, it would represent a major policy turnaround. She must not make the wrong decision.

(From The Yomiuri Shimbun, Feb. 27, 2026)